March 1 (Reuters) - Oil prices rose on Friday and were set to end the week modestly higher as talks over a potential ceasefire in Gaza were further complicated by the deaths of more than 100 Palestinians waiting for an aid delivery.

Brent futures for April delivery rose 29 cents, or 0.4%, to $82.20 a barrel by 0118 GMT, while U.S. West Texas Intermediate (WTI) rose 22 cents, or 0.3%, to $78.48.

WTI is on track for a 4% increase this week, while Brent is holding near last week's settlement price. Brent has hovered comfortably above the $80 mark for three weeks, with the Middle East conflict having only a modest impact on crude flows from attacks on shipping traffic in the Red Sea.

President Joe Biden said the U.S. was checking reports of Israeli troops firing on people waiting for food aid in Gaza, saying he believed the deadly incident would complicate talks of a ceasefire. Israel has blamed the deaths on crowds surrounding the aid trucks, saying victims were trampled or run over.

Even before Thursday's incident, Israel and Hamas had said there was a big gulf between them in the talks in Qatar to hammer out details of a 40-day truce in the Gaza war. Qatari mediators have said there has been no breakthrough and the most contentious issues remain unresolved.

In other news, China's manufacturing activity in February contracted for a fifth straight month, an official factory survey showed on Friday, raising pressure on Beijing policymakers to roll out further stimulus measures as factory owners struggle for orders.

Also, the U.S. Federal Reserve's preferred inflation gauge, the U.S. personal consumption expenditures (PCE) index, showed January inflation in line with economists' expectations, keeping a June interest rate cut on the table.

On the supply side, a Reuters survey showed the Organization of the Petroleum Exporting Countries (OPEC) pumped 26.42 million barrels per day (bpd) this month, up 90,000 bpd from January. Libyan output rose month-on-month by 150,000 bpd.

A Reuters survey of 40 economists and analysts forecast an average price of $81.13 a barrel for the front-month contract this year. (Reporting by Laura Sanicola; Editing by Tom Hogue)